The economics of new nuclear power plants in liberalized electricity markets *

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "The economics of new nuclear power plants in liberalized electricity markets *"

Transcription

1 The economics of new nuclear power plants in liberalized electricity markets * Pedro Linares, Adela Conchado U. Pontificia Comillas August 17, 2009 Abstract The nuclear debate is strong in many countries, with the estimation of its economics being a significant part of it. However, most of the estimates are based on a levelized-cost methodology, which presents several shortcomings, particularly when applied to liberalized electricity markets. Our paper provides results based on a different methodology, by which we determine the breakeven investment cost for nuclear to be competitive with other electricity generation technologies. Our results show that the cost competitiveness of nuclear is not clear, and that several uncertainties may prevent the revival expected by some. Keywords: nuclear power, economics, liberalized electricity markets JEL Codes: Q41, Q47, L94 1 Introduction There has been lately much talk about the possible renaissance of nuclear power, according to both popular (e.g. Crumley, 2009) and academic sources. Nuttall and Taylor (2008) took as the first signs for this renaissance the high prices being paid for existing nuclear power plants including the high prices paid recently by EDF for British Energy nuclear assets (Thomas, * Draft version. Comments welcome. Instituto de Investigación Tecnológica, Universidad Pontificia Comillas, Alberto Aguilera 23, Madrid, Spain; MR-CBG, Harvard Kennedy School; and FEDEA

2 2009). Although of course these signs should probably be interpreted just as an evidence of the profitability of already-existing, largely written-off, lowoperating-cost nuclear plants in deregulated electricity markets, the fact that more than 40 nuclear power plants are currently being built across the world, and the change in attitude towards nuclear in some countries (Nuttall, 2009) makes it worthwhile to look also at the prospects for construction of new nuclear plants in Europe and the US. In Western Europe, two nuclear power plants are being built by AREVA. In the US, Sioshansi (2008) has argued that the recent filings of formal applications for new nuclear reactors, or the orders for components for them, are indicators of serious intention to build. Steven Chu, the US Secretary of Energy, also declared recently that I think nuclear power is going to be a very important factor in getting us to a low carbon future. Some simulation models also show bright prospects for nuclear. Recent European Commission studies (EC, 2007) show for example that nuclear will go from 380 GW in 2005 (340 GW in developed countries) to 1,100 2,000 GW in 2050 ( GW in developed countries). This possible renaissance for nuclear is fueled basically by two arguments: one, its relatively low carbon emissions (although this has been challenged by Storm, 2008); and second, its higher security of supply and lower price volatility compared to fossil fuel alternatives. These have been joined recently by an additional one, cost. Although cost has usually been considered to be one of the four problems of nuclear, together with safety, proliferation, and waste (e.g. MIT, 2003), some studies recently put nuclear as a competitive alternative for electricity generation (e.g. EC, 2008; IEA, 2008), particularly when introducing a price for carbon emissions (Joskow and Parsons, 2009). This has prompted some to formulate the nuclear debate as a trade-off question: either we have nuclear, or we must pay more for our electricity

3 We find this discussion about costs very relevant for energy policies worldwide: if nuclear energy is required for achieving a low carbon future, or for having more stable electricity prices, we should ascertain whether this will take place spontaneously, that is, if firms will invest in new nuclear plants just out of its cost competitiveness; or if we rather need some support from the government and, in this case, if this support is justified or not. Therefore, a careful analysis of the cost of new nuclear power plants, and of its comparison with other electricity generation alternatives seems more than warranted. However, most of the studies looking at the costs of nuclear power do so by using a levelized-cost methodology, which in turn depends critically on assumptions of investment cost, and is also of limited application for deregulated markets (which are currently the standard in Europe and also in many states in the US). The objective of this paper is to try to contribute to a better understanding of the cost competitiveness of new nuclear power plants in liberalized electricity markets, by using an improved methodology to undertake the analysis. Our results can be read in two ways: from a private perspective, if nuclear power is competitive in a purely monetary basis; and also, if it is deemed appropriate due to other reasons, if it will require economic support for private companies to invest. Section 2 presents a review of some of the current studies and discusses their shortcomings. Section 3 describes the methodology and data used in the paper, and Section 4 shows the results obtained. Finally, Section 5 offers some conclusions and recommendations. We would like to make clear before going on that we acknowledge that a nuclear policy should not only take into account economic costs: all advantages and disadvantages of nuclear should also be considered to make a final decision: whether to allow new investments or forbid them, whether to penalize nuclear or support it. In order to do that a full cost-benefit analysis or at least a quantification of the externalities to be considered should be carried out see Kennedy (2007), or EC (2005) as examples of this - 3 -

4 approach. However, we believe that the discussion of monetary costs is rich enough as to focus just on it in this paper. 2 Assessing the costs of nuclear power As mentioned before, most of the studies looking at the cost of new nuclear power plants are based on a levelized-cost (LEC) methodology. Koomey and Hultman (2007) offer a fine example of this approach, as well as a review of previous studies. Rothwell (2004) also discusses the fundamentals of the costs of nuclear. The most relevant and updated study may be the update of the MIT report The future of nuclear (Du and Parsons, 2009). Other up-todate study worth citing is Cooper (2009). This methodology has become very popular, since it provides a single indicator of the competitiveness of the different electricity generation technologies. However, it also has several shortcomings, particularly for liberalized markets, which we discuss below. First, it is critically dependent on the assumption of investment cost. Of total costs for nuclear electricity, approximately 70% come from investment cost (20% from O&M costs, and 10% from fuel). However, as Joskow and Parsons (2009) correctly point out, the lack of reliable contemporary data for the actual construction costs of real nuclear plants make very uncertain any estimate of future construction and therefore electricity generation costs. Indeed, some of the studies pointing to cost competitiveness for nuclear were based on the MIT (2003) figure of $1,500/kW, which was not a real construction cost but just a target to be attained. Therefore, it would be better to use a method which does not require assuming an investment cost ex-ante. Another critical assumption in LEC studies is the hours of operation for the different technologies. Since investment costs are distributed among all operating hours to calculate the final cost of generating electricity, the more hours a plant is assumed to operate, the cheaper it will be. However, the hours a plant operates also depend on its cost, and therefore this becomes - 4 -

5 endogenous to the problem. Although this is not a critical issue for nuclear since nuclear plants usually provide baseload power, and therefore run continuously, it is for marginal units such as gas combined cycles or coal power plants. Other endogeneity issue is the correlation between fuel prices, carbon prices, and electricity prices more salient in liberalized markets. The competitiveness of power plants will depend not only on their costs, but also on their income. And this income will be basically the electricity market price, which is in turn determined by the cost of the marginal unit. Since these are usually gas or coal power plants, the price will be determined by gas, coal, and carbon allowance prices. Again, this affects differently baseload technologies nuclear and marginal technologies coal or gas. These two latter problems are further complicated by the general inability of LEC methodologies to account for different electricity load levels (and therefore different prices and operating hours). We also mentioned before that the LEC methodology is not well suited for liberalized electricity markets. First, in these markets cost recovery is not guaranteed, and new, cheaper technologies may easily displace existing investments before the end of their expected lifetime (Linares, 2001), therefore reducing their cost competitiveness. Second, the LEC methodology does not handle well the risks underlying liberalized electricity markets. Real options approaches have been developed (Rothwell, 2006; Roques et al, 2006) to address, at least partially, these concerns. Unfortunately, these methods also suffer from similar shortcomings regarding assumptions of costs and operating hours. Finally, LEC studies only take into account costs, but not the volume of new investment in an electricity market: other constraints coming from energy policy (renewable energy promotion, for example), the shape of the load curve (with no requirements for new baseload power) or the extension of the - 5 -

6 license of existing power plants as seems to be the case in the US (Joskow and Parsons, 2009) may do not allow for new investments in nuclear plants. Therefore, we believe that the analysis of the cost competitiveness of new nuclear power plants would be improved by using a different methodology such as the one presented in this paper. This method assesses the cost competitiveness of new nuclear power plants by inquiring whether there would be any spontaneous (that is, based on cost competitiveness alone) investments in the electricity system studied, and which should be the investment cost required to allow for these investments to take place. To do that, we simulate the behavior of the electricity market in the long term, with a generation-expansion model (Linares et al, 2008a). We leave the investment cost for nuclear as a decision variable, and iterate until we find the breakeven investment cost, that is, the investment costs that makes it profitable to build new nuclear. This allows us to solve most of the problems related to LEC: we do not have to assume ex-ante any investment cost for nuclear or operating hours for all technologies, since these are outputs of the model; we account not only for costs, but also for income, since the price of the electricity market is endogenously determined by the model even considering the effect of market power, since the model allows for simulating oligopolistic behavior; we simulate the evolution of liberalized electricity markets, by allowing for new technologies to retire earlier investments even if they have not been recovered; and we take into account other possible constraints of the system, such as renewable energy promotion, or demand growth. In addition, we are able to compare all the possible electricity-generation technologies simultaneously in an easier way

7 3 An application to the Spanish electricity market We have applied the method presented above to the Spanish electricity system, since we consider it is a good representative of liberalized European and US power markets and therefore some of our results may be easily extrapolated to them. The 2008 Spanish electricity mix is basically 10-15% hydro (depending on rainfall), 20% nuclear, 15% coal (both imported and domestic, the latter including black and brown lignite), and 30% combined cycles. Renewables (not including hydro) contribute with 15% of the total demand, and are expected to grow up to 40%. The market is a rather concentrated one, with two large firms covering a large part of the generation market and only four more small firms with some generation capacity, which cover the rest of the market. More information about the Spanish electricity system and its expected evolution may be found in Linares et al (2008b). In addition, we believe that this type of study is very relevant for Spain, in which a very strong debate is being held about the future role of nuclear in the electricity mix. Although the government recently denied the extension of the operating license for the oldest nuclear power plant in Spain, this does not necessarily mean that the debate has been closed. 3.1 Basic assumptions We will assess the competitiveness of the construction of new nuclear power plants in the next ten years ( ). We have chosen ten years as the relevant period to be assessed because it is short term for construction purposes, and therefore we can safely assume that the technology will be very much the same as the current one, and also to remove much of the long-term uncertainties. This requires us to simulate more years, to cover the economic lifetime of the power plants. We have simulated therefore a period from 2008 until

8 We do not include dismantling costs. At the discount rates used (see below), costs taking place 40 years or more in the future are not relevant. We also do not consider inflation. Therefore, all our costs are real 2007 euros. We believe the impact of inflation should not be very relevant, since it should affect similarly all technologies (capacity constraints aside, see below). Indeed, the only relevant impact might come from the difference in construction duration between the different technologies, particularly concerning nuclear. However, we try to deal with this by using overnight costs as our reference investment cost for nuclear. We agree with Koomey and Hultman (2007) in that installed costs give a more acceptable picture of actual capital costs than do the overnight costs by incorporating capital costs and inflation. However, most of the real costs quoted in industry and other studies are overnight costs, so this is the unit we will use for our assessment. As for the investment and operation costs for the alternative technologies: the relevant ones are the investment cost for gas combined cycles and for coal power plants, together with the cost of operating coal power plants. As will be explained below, the price of gas will be a variable parameter, and the cost of renewables is not relevant for this analysis because their contribution will be set as a quota that is, we will not compare nuclear and renewables on a cost basis, although separate analysis show that wind will be competitive with nuclear under most of the scenarios. We have assumed an investment cost for gas combined cycles of 635 /kw, following Du and Parsons (2009) and also consistent with EC (2008). The investment cost for coal power plants is 1,725 /kw, and the price of coal is set at 2.6 US$/MMBtu, also from Du and Parsons (2009). The efficiency of a combined cycle has been set at 50%, and that of a coal power plant at 38%. We have assumed 2 years for building a gas combined-cycle, and 2 years possibly a bit optimistic, here we follow again Du and Parsons(2009) for a coal power plant

9 A relevant issue here is carbon capture and sequestration. We have not included this technology in the analysis basically because it is not expected to become commercial in the following ten years (the scope in which we have looked for new nuclear investments). In addition, at the carbon prices considered (see below), it would not become competitive (Al-Juaied and Whitmore, 2009) Finally, some caveats, and their consequences on results: we take fuel prices as fixed (although they will probably be volatile, which would be positive for nuclear), we do not consider intermittency in renewable energy production (this makes nuclear more competitive than under an intermittency assumption, since nuclear cannot follow well the changes in renewable energy production), and we do not account for financial issues. We are also not taking into account other economic issues outside the scope of the model, such as the possible capacity constraints (human and manufacturing infrastructure) due to an increased demand for nuclear power plants, which in turn might result in higher costs (Joskow and Parsons, 2009). Although of course incorporating all these issues would certainly improve the validity of our results, we think that they should not change much the overall picture, at least in the short term. 3.2 Uncertain parameters Of course, we would not attempt to carry out an analysis of the competitiveness of nuclear under a single scenario. There are many uncertainties surrounding the economics of nuclear (Rothwell, 2004; Nuttall and Taylor, 2008) and here we have selected the ones which we consider more relevant: the growth of demand, the development of renewable energy which will basically result in a lower demand for conventional sources, the discount rate (or hurdle rate) for the investment, the price of natural gas, the price of carbon allowances, the construction duration of nuclear, and the availability of nuclear power plants. For all them, we have selected a baseline figure, and a reasonable range. In this sense, we have tried to - 9 -

10 follow the recommendations from Koomey and Hultman (2007), in that assumptions that deviate significantly from historical experience need careful justification Annual demand growth We assume as our baseline figure a 1% annual demand growth. This is quite low compared to the recent figures for Spain (around 4% for the last years). However, the recent recession has resulted in a change in this trend, and in fact energy officials and utilities do not expect to return to 2007 levels until at least Therefore, choosing 1% as the average annual growth for the entire period considered seems like a reasonable assumption, moreover given the emphasis given by the current government to energy conservation programs. The lower value for the range has been set a 0.5% as a conservative estimation, whereas the higher value has been set at 2% (which again seems reasonable given the long term implied) Contribution of renewables Given that in most electricity markets in Europe renewables do not enter the market based on cost, but based on public support, and that this support is usually determined based on a volume quota although it may sometimes be instrumented through a subsidy, we have formulated the scenarios for the contribution of renewables as targets for the specific technologies, as proposed by the Spanish government. These targets are 42,000 MW for onshore wind, 3,000 MW for offshore wind, 5,300 MW for solar thermal, 8,000 for solar PV, 3,200 for biomass, and 5,500 MW for small hydro. These targets have been set for , so there is a possibility that they will be enlarged in the future. We have accounted for that by assuming a possible increase of 25% of these targets. We also consider the possibility of the targets not being met (quite possibly for biomass and solar thermal, but

11 also for the rest if the subsidy is not high enough), and therefore we also analyze a 25% decrease in these targets Discount rate This is possibly one of the most critical parameters of this type of analysis. Given the large weight of investment costs for nuclear, the rate at which these costs are written off will determine to a large extent the competitiveness of this technology. Here the most relevant question is whether the discount rate for nuclear has to be different from that of gas or coal. Under a merchant power plant model, such as the one followed in Du and Parsons (2009), it seems reasonable to allocate a risk premium for nuclear. Both the large contribution of investment costs and the risks for delays and cost overruns, together with the variation in market prices, are reasons enough for this. Indeed, Roques et al (2006) calculate a risk premium between 3 and 5.2% for merchant plants. It could be argued that investing in nuclear reduces a company s overall exposure to fossil fuel and gas prices. However, the higher correlation between gas, carbon allowance, and electricity prices reduces the intrinsic riskiness of these investments to a lower level than nuclear plants (Roques et al, 2006). But it is not clear whether the merchant model would be viable in a liberalized environment. As has been shown by the recent bids in the UK, utilities seem to be thinking about financing investments from their own balance sheet. Although that severely limits the number of investments to be undertaken since only the more powerful players have enough financial muscle and expertise to do it, it seems that this is currently the only realistic alternative, and therefore it is the one we will consider. We acknowledge of course that this improves the competitiveness of nuclear power plants in our analysis, and that should be taken into account in the results

12 Therefore, we will use a reasonable weighted average cost of capital (WACC) measure as the hurdle rate. Our baseline assumption is a WACC of 9%, with a range between 6 and 12%. This is pretty consistent with the references in the literature (Du and Parsons, 2009; Cooper, 2009) Price of natural gas Natural gas prices are probably the most volatile of the parameters considered. Their linking to oil prices although it seems that this is becoming less so, moreover with the advent of shale gas make them follow a very spiky trend and therefore it is difficult to agree on a reasonable range. Currently, prices seem to be stable around 7 $/MMBtu, which were also the average prices before the oil price crisis. Therefore, we have chosen that figure as our baseline assumption. The lowest bound is set at 4 $/MMBtu, and the highest one at 14 $/MMBtu, taken from historic records. However, and in order to account for the expectations of much higher oil prices in the future, we have also considered an extreme scenario of 20 $/MMBtu Price of carbon allowances Carbon allowance prices are also very variable in nature, and in addition, this variability comes from regulatory decisions (the targets for carbon emissions reductions). This makes them quite difficult to predict, so again, we have relied in those values most used in the literature. The baseline value has been set at /tco 2 (equivalent to 25$), with the lower and higher ends set at 10 and 40 /tco 2. The lower and mid values are consistent with the prices observed at the EU ETS, with the higher value trying to represent the expected price for These seem reasonable estimates for the time frame considered ( ). But again, we should not exclude higher allowance prices in the future, if climate negotiations are successful and more stringent targets are set. Therefore, we also consider an extreme scenario of 100 /tco

13 3.2.6 Construction duration The baseline scenario assumes 6 years for the construction of a nuclear power plant, from the start of the licensing period when the first costs are incurred to the start of the operation phase. This number has been taken from Du and Parsons (2009), and is considered too low by Koomey and Hultman (2007), who cite 9 years as the median duration for the US nuclear fleet. However, as cited in this latter paper, construction duration in the historical sample was influenced by a complex set of interrelated factors, including rapid regulatory changes (both before and after the Three Mile Island accident), quality control problems in construction, increased reactor size, reduced electricity demand growth, and utility financial constraints. This, together with the recent efforts to streamline the licensing procedure, would make it reasonable to assume a certain reduction of construction times, as we do here. In fact, the IAEA database shows that construction times since 1991 range from 4 to 8 years, with a median of 5.2, as cited in Roques et al (2006) However, we also include a more pessimistic scenario of 9 years to assess its impact on the results, and because of the historic risk of delays also shown more recently in the Olkiluoto power plant. On the optimistic side, we assume 5 years as the construction duration Availability of nuclear power plants The availability of nuclear power plants has improved very much recently, partly because of the incentives of a liberalized electricity market (Zhang, 2007). Recent figures for the US are around 90%, compared to 71% in Spanish nuclear power plants also feature availabilities higher than 90%. However, as Joskow and Parsons (2009) correctly point out, it is the lifetime capacity factor which should be used, since new plants must recover their investment over their economic lifetime. Only Finland has a lifetime capacity factor higher than 90% for its nuclear fleet. The lifetime factor for the US is 78%, and the global capacity factor in the last decade is 82%

14 Therefore, it seems reasonable to use a baseline figure of 85%, within a range of 80-90%, as a lifetime capacity factor for new nuclear power plants. A summary of all the values considered for the uncertain parameters is presented in Table 1. Table 1. Values for the uncertain parameters Annual demand growth Contribution from renewables Low Baseline High 0.5% 1% 2% Decrease 25% Wind: 42,000 MW Offshore wind: 3,000 MW Solar thermal: 5,300 MW Solar PV: 8,000 MW Biomass: 3,200 MW Small hydro: 5,500 MW Increase 25% Discount rate 6% 9% 12% Gas price 4 $/MMBtu 7 $/MMBtu 14 $/MMBtu Carbon 10 /tco /tco 2 40 /tco 2 allowance price Construction duration for nuclear 5 yr 6 yr 9 yr Availability of nuclear 80% 85% 90% Source: Own elaboration 3.3 Breakeven cost for nuclear Once we have determined all the parameters for our model, we proceed to run it. As explained before, we run the generation-expansion model iteratively until we find the breakeven investment cost for new nuclear, that is, the maximum investment cost that will allow for investing in this technology in a profitable way. We remind here that the model used simulates the behavior of the electricity market by maximizing the profit of firms subject to the operation constraints of the system. More details about the model in Linares et al (2008a). For the baseline scenario (the mid values in the ranges of variable parameters), the breakeven overnight cost that should be attained by new

15 nuclear plants is 2,880 /kw. For the rest of scenarios considered the breakeven overnight cost is presented in Table 2. We present the results for the optimistic and pessimistic values (from the nuclear point of view). Table 2. Breakeven overnight costs for new nuclear ( /kw) Pessimistic Optimistic Annual demand growth 2,752 2,909 Contribution from renewables 2,747 2,909 Discount rate 2,260 3,280 Gas price 1,798 3,173 Carbon allowance price 2,626 3,182 Construction duration for nuclear 2,527 2,934 Availability of nuclear 2,730 3,041 Source: Own elaboration As may be seen, nuclear becomes more competitive, expectedly, when: - Demand increases, or renewable energy targets are reduced - The discount rate is lower - Carbon prices are higher - Gas prices are higher - Nuclear plants availability increases - Construction duration is reduced. It may also be observed that the most critical parameters are the discount rate, the gas and carbon price, and also the construction duration. Demand growth and the contribution from renewables show a moderate influence in the breakeven cost. We have also considered interesting to run two extreme scenarios (those in which both the pessimistic and optimistic values are combined, respectively) to have a worst- and best-case estimation of the overnight cost to be

16 attained by new nuclear power plants. Under the worst-case scenario, the overnight cost should be lower than 1,170 /kw. Under the most favorable one, the overnight cost should be lower than 3,700 /kw. We also ran an extreme climate scenario, in which carbon prices reach 100 /tco2, and gas prices reach 20 $/MMBtu. The rest of parameters remain at their baseline values. Here the breakeven overnight cost is 3,800 /kw. 3.4 Comparison with current overnight costs Our final calculation then should be to compare the breakeven overnight costs obtained with the current overnight costs as declared by the industry. Here we rely on the exhaustive work carried out by Du and Parsons (2009), who put on comparable terms the most recent cost filings in the US, Japan and South Korea. These are shown in Tables 3 and 4. Costs have been translated from US$ to euro using a 0.7 rate. Table 3. Overnight costs for recent nuclear power plants in Japan and S.Korea ( ) Type of reactor Capacity (MW) Date Overnight cost ( /kw) ABWR BWR ABWR OPR OPR Source: Du and Parsons (2009) Table 4. Overnight costs for proposed nuclear power plants in the US Type of reactor Capacity (MW) Date Overnight cost ( /kw) ABWR N/A 2198 ESBWR AP AP AP Source: Du and Parsons (2009)

17 These costs are also in line with those estimated by the European Commission (EC, 2008) at 2,680 /kw, and from EPRI (2008) at 2,786 /kw. As we may see, the breakeven overnight cost obtained in our analysis (2,880 /kw for the mid estimate) is just in the average of the costs proposed for new nuclear power plants in the US, and also a bit higher than the European Commission estimate. That would mean that, if the parameters considered remain at their set values (particularly the most critical parameters described before), and most importantly, if there are no cost overruns, nuclear would be competitive on a purely economic basis, although at a very tight margin. When more optimistic scenarios are considered (basically, higher gas and carbon prices), then nuclear would prove to be very competitive (3,100 3,800 /kw compared to 2,800 /kw), again if there are no cost overruns. However, there is also the possibility of finding less optimistic scenarios: if gas prices are not high enough (one possibility is the large supply of shale gas), carbon prices are not high enough (because of loose carbon targets, or competitiveness concerns), interest rates are higher (either global, or due to a risk premium for nuclear), or there are significant delays in construction times (as experienced before), then, even without cost overruns, nuclear would not be competitive, sometimes by a large margin. Our results are clearly more pessimistic towards nuclear that those of the European Commission (EC, 2008) and the IAE (2008). They are also more pessimistic than the MIT (2009) study: we find that nuclear is just barely competitive under the no risk-premium, carbon allowance price scenario, whereas the MIT study for that scenario finds that nuclear is clearly more competitive than gas and coal (6.6 cents/kwh for nuclear, 7.3 cents/kwh for gas). This is even more interesting when we learn that the average capacity factor in our model for combined cycles is about 50%, compared to the 85% assumed in the MIT study. Since the initial parameters used are basically the same as in the MIT study, we believe that this difference comes from the

18 change in the methodology, which in turn should solve some of the shortcomings of the LEC methodology (see Section 2). 4 Conclusions A first conclusion of our analysis is similar to the conclusion of Joskow and Parsons (2009), in that the cost competitiveness of nuclear energy in liberalized markets is not clear: under the baseline scenario, results are very tight. And then, there are many the several uncertainties surrounding them. The first of these uncertainties is the possibility of a cost overrun. In that sense, some argue that the nuclear industry has an observed tendency to forecast overconfidence (Koomey and Hultman, 2007). Data shown by MIT (2003) point to significant historic overruns of up to 300%. And our results show that just a 10% overrun would make nuclear not competitive. Even in the most favorable scenario, the cost overrun should be lower than 35%. Looking at the past history of nuclear would then result in concluding that nuclear will probably not be competitive on a purely economic basis. Therefore, cost will not be a plus for nuclear, but will still be one of its problems. To put it in other words, the possible trade-off between more nuclear and higher electricity prices implied in the nuclear debate would not be such. Then, there are other significant uncertainties. As mentioned before, the more critical are: construction duration, gas prices, carbon prices, and interest rates (including risk premiums for nuclear). Therefore, the final decision will have to be based on risk analysis, with many of the parameters difficult to fit in a probability distribution. This will probably require an analysis of the robustness of the decisions under an uncertain environment (as in Linares, 2002), which is outside the scope of this paper. An important issue is that these uncertainties affect differently public and private decisions: because of the reasons mentioned before (Roques et al,

19 2006), higher gas and carbon prices do not result in increased chances for nuclear in liberalized markets, whereas the other uncertainties are likely to be resolved negatively for nuclear Therefore, it seems unlikely to expect a spontaneous decision by utilities in liberalized markets to invest in new nuclear power plants, unless either the nuclear industry itself, or the government, step in to change the current situation and reduce the uncertainties involved. The nuclear industry might have a role in two directions: reducing the cost of nuclear investments; and reducing the risks of cost overruns and construction delays by standardizing design and projects, better project management, good financial and risk planning, or modular construction. In that latter direction, many risk-hedging instruments are already available: PPA contracts, O&M contracts, turnkey contracts, insurance, or financial instruments. Governments might also want to support nuclear: although private companies are not concerned about high gas or carbon prices, price volatility, or dependence on fossil fuels, governments may be so. In addition, some of the risks of nuclear may be socially diversifiable, thus constituting a market failure to be corrected. In that case, a result from our study is that probably the most effective way to support nuclear is by reducing risks. The current US policy on loan guarantees for nuclear is a good example of this, although it has only been designed for a limited number of plants. Instruments to promote diversity in the energy mix would also probably help nuclear (Nuttall and Taylor, 2008). Another important role for governments is the streamlining of licensing procedures. Navarro (2008) found evidence that a streamlined licensing process, and standardized reactor designs reduced construction duration and construction costs in Japan compared to the US

20 However, it is not clear whether governments would be interested in pursuing this route. First, even from the social point of view, the cost competitiveness of nuclear is not clear. And second, if finally the development of nuclear requires some degree of economic support, then a higher level question comes forward: given the scarcity of public funds, which technology should be supported, and to what level? Because we are also supporting renewable energy, and energy conservation. Here the discussion would have to move then to a cost-benefit analysis of all three options. And it is not clear that nuclear would be the winner, especially compared to conservation. But that remains for another paper. References Al-Juaied, M., A. Whitmore (2009). Realistic costs of carbon capture. Belfer Center Discussion Paper Cooper, M. (2009). The economics of nuclear reactors: Renaissance or relapse?. Institute for Energy and the Environment. Vermont Law School. Crumley, B. (2009). Areva s field of dreams. TIME Magazine, August 5th. Du, Y., J.E. Parsons (2009). Update on the cost of nuclear power. CEEPR Working Paper EC (2007). Global climate policy scenarios for 2030 and beyond. Joint Research Centre, European Commission. EC (2008). Energy sources, production costs and performance of technologies for power generation, heating and transport. Commission staff working document accompanying the Communication from the commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions Second Strategic Energy Review: An EU energy security and solidarity action plan. {COM(2008) 744}

21 EPRI (2008). Program on Technology Innovation: Integrated Generation Technology Options. Technical Update, November 2008 IEA (2008). Energy Technology Perspectives International Energy Agency, Paris. Joskow, P.L. (2006). The Future of Nuclear Power in the United States: Economic and Regulatory Challenges. Working Paper AEI-Brookings Joint Center for Regulatory Studies. Joskow, P.L., Parsons, J.E. (2009). The economic future of nuclear power. Kennedy, D. (2007). New nuclear power generation in the UK: Cost benefit analysis. Energy Policy 35: Koomey, J. and Hultman, N.E. (2007). A reactor-level analysis of busbar costs for US nuclear plants, Energy Policy 35 (2007) Linares, P., S. Isoard (2001). Effects of energy markets de/reregulation onto EU s technology portfolio: conventional and emerging technologies. Report EUR EN. European Communities. Linares, P. (2002). Multiple Criteria Decision Making and Risk Analysis as Risk Management Tools for Power Systems Planning. IEEE Transactions on Power Systems, 17: Linares, P., F.J. Santos, M. Ventosa, L. Lapiedra (2008a). Incorporating oligopoly, CO2 emissions trading and green certificates into a power generation expansion model. Automatica, 44: Linares, P., F.J. Santos, I.J. Pérez Arriaga (2008b). Scenarios for the evolution of the Spanish electricity sector: Is it on the righ path towards sustainability? Energy Policy 36 (2008) MIT (2003). The Future of Nuclear Power

22 MIT (2009). Update on the cost of nuclear power. Nuttall, W.J. (2009). Nuclear Energy in the Enlarged European Union. EPRG Working Paper U. of Cambridge Electricity Policy Group. Nuttall, W.J., S. Taylor (2008). Financing the nuclear renaissance. EPRG Working Paper Cambridge Working Paper in Economics U. of Cambridge Electricity Policy Group. Roques, F.A., Nuttall, W.J., Newbery, D.M., de Neufville, R., Connors, R. (2006). Nuclear Power:A Hedge against Uncertain Gas and Carbon Prices?. The Energy Journal 27 (4): Rothwell, G. (2004). Nuclear Power Economics. Encyclopedia of Energy 4: Rothwell, G. (2006). A Real Options Approach to Evaluating New Nuclear Power Plants. The Energy Journal 27 (1): Sioshansi, F.P. (2008). Nuke revival: When it rains, it pours. The Electricity Journal 21: 3-8. Storm, J.W. (2008). Nuclear power the energy balance. Thomas, S. (2009). Areva and EDF: Business prospects and risks in nuclear energy. Report commissioned by Greenpeace International. March Zhang, F. (2007). Does Electricity Restructuring Work? Evidence From The U.S. Nuclear Energy Industry. The Journal of Industrial Economics 55:

Sharing knowledge across Mediterranean Jordan. Cost factors of nuclear electriciy. Jean-Jacques GAUTROT Special Advisor to the AREVA CEO

Sharing knowledge across Mediterranean Jordan. Cost factors of nuclear electriciy. Jean-Jacques GAUTROT Special Advisor to the AREVA CEO Sharing knowledge across Mediterranean Jordan Cost factors of nuclear electriciy Jean-Jacques GAUTROT Special Advisor to the AREVA CEO Jordan,1 st March 2010 6.7 billion people Photo composite NASA sans

More information

L.D. Carter For USCSC

L.D. Carter For USCSC L.D. Carter For USCSC Why was a review needed? How was the analysis framed? What sources of information were used? What is the answer? What factors could significantly change the answer? What is the industry

More information

The Future of Nuclear Power in the United States: Economic and Regulatory Challenges. by Paul L. Joskow

The Future of Nuclear Power in the United States: Economic and Regulatory Challenges. by Paul L. Joskow The Future of Nuclear Power in the United States: Economic and Regulatory Challenges by Paul L. Joskow 06-019 December 2006 December 27, 2006 THE FUTURE OF NUCLEAR POWER IN THE UNITED STATES: ECONOMIC

More information

MTEP18 Futures. Planning Advisory Committee June 14, 2017

MTEP18 Futures. Planning Advisory Committee June 14, 2017 MTEP18 Futures Planning Advisory Committee June 14, 2017 Overview Objective: Present final MTEP18 Futures and an overview of stakeholder feedback Key Takeaways: Four Futures to be used in MTEP18 to consider

More information

WIND POWER TARGETS FOR EUROPE: 75,000 MW by 2010

WIND POWER TARGETS FOR EUROPE: 75,000 MW by 2010 About EWEA EWEA is the voice of the wind industry actively promoting the utilisation of wind power in Europe and worldwide. EWEA members from over 4 countries include 2 companies, organisations, and research

More information

Methodology for calculating subsidies to renewables

Methodology for calculating subsidies to renewables 1 Introduction Each of the World Energy Outlook scenarios envisages growth in the use of renewable energy sources over the Outlook period. World Energy Outlook 2012 includes estimates of the subsidies

More information

Monte-Carlo Optimization Framework for Assessing Electricity Generation Portfolios

Monte-Carlo Optimization Framework for Assessing Electricity Generation Portfolios Monte-Carlo Optimization Framework for Assessing Electricity Generation Portfolios Peerapat Vithayasrichareon 1, Iain MacGill 1,2, and Fushuan Wen 1,2 1 School of Electrical Engineering and Telecommunications

More information

2015 Economic Planning Study Assumptions

2015 Economic Planning Study Assumptions 2015 Economic Planning Study Assumptions Erik Winsand, ATC Economic Planning May 13, 2015 atcllc.com Introduction Process Overview and Timeline MISO MTEP16 Futures Assumptions Next Steps atcllc.com 2 Process

More information

Long-term Transition Paths towards a Sustainable Energy Supply

Long-term Transition Paths towards a Sustainable Energy Supply Long-term Transition Paths towards a Sustainable Energy Supply Gerrit Jan Schaeffer PhD. Manager Transition and Innovation Group Policy Studies Unit of the Energy Research Center of the Netherlands ECN

More information

Wind power... can compete with other power generation options at good sites.

Wind power... can compete with other power generation options at good sites. Debunking the myths The Myth: Wind power is expensive The Facts: Wind power... can compete with other power generation options at good sites. Wind cannot compete with the cost of producing electricity

More information

Where is moving the electricity sector and how are Electric. Industry Investment Decisions Influenced by Potential

Where is moving the electricity sector and how are Electric. Industry Investment Decisions Influenced by Potential Where is moving the electricity sector and how are Electric Industry Investment Decisions Influenced by Potential Instability in the Regulatory Environment by : G. Dodero I.P.G. Industrial Project Group

More information

14 August 08

14  August 08 We vegotthepower After thirty years treading water, the nuclear power industry in the US is undergoing a renaissance. Paul Hinnenkamp, vice president of nuclear business development for Entergy Corporation,

More information

Generation Technology Options in a Carbon- Constrained World

Generation Technology Options in a Carbon- Constrained World Generation Technology Options in a Carbon- Constrained World Prepared by the Energy Technology Assessment Center (Reference: EPRI Report 1022782) Levelized Cost of Electricity Analysis Objectives Provide

More information

U.S. Nuclear Energy Program

U.S. Nuclear Energy Program Office of Nuclear Energy U.S. Nuclear Energy Program Bradley Williams Senior Advisor, Office of Nuclear Energy U.S. Department of Energy November 16, 2016 Trends in Nuclear Recognition of importance of

More information

Wind Power in Context A clean Revolution in the Energy Sector

Wind Power in Context A clean Revolution in the Energy Sector Supported by Ludwig Bölkow Stiftung Embargo: January 9, 2009 Wind Power in Context A clean Revolution in the Energy Sector Presentation by Dr. Rudolf Rechsteiner January 9-2009 press conference of Energy

More information

Nuclear Power Economics and Markets

Nuclear Power Economics and Markets Nuclear Power Economics and Markets IBC - Decommissioning of Nuclear Reactors & Materials 29 30 September 2014; Miami, Florida Edward Kee Disclaimer The NECG slides that follow are not a complete record

More information

CCS - Commercially Viable but a Political Priority?

CCS - Commercially Viable but a Political Priority? CCS - Commercially Viable but a Political Priority? Presentation to the United States Energy Association Joan MacNaughton, Senior Vice President, Power & Environmental Policies August 4, 2011 Agenda Alstom

More information

Building a Profitable Wind Business

Building a Profitable Wind Business GE Energy Building a Profitable Wind Business Vic Abate July 26, 2006 This document contains "forward-looking statements" - that is, statements related to future, not past, events. In this context, forward-looking

More information

Supporting the deployment of selected low-carbon technologies in Europe

Supporting the deployment of selected low-carbon technologies in Europe Supporting the deployment of selected low-carbon technologies in Europe Implications of technoeconomic assumptions. An energy system perspective with the JRC-EU-TIMES model Wouter Nijs, Savvas Politis,

More information

U.S. Nuclear Energy Program

U.S. Nuclear Energy Program Office of Nuclear Energy U.S. Nuclear Energy Program Bradley Williams Senior Advisor, Office of Nuclear Energy U.S. Department of Energy October 13, 2016 Nuclear Energy Tribal Working Group Trends in Nuclear

More information

Coordination of carbon reduction and. renewable energy support policies. Pedro Linares a,b, *, Francisco Javier Santos a, Mariano Ventosa a

Coordination of carbon reduction and. renewable energy support policies. Pedro Linares a,b, *, Francisco Javier Santos a, Mariano Ventosa a CP361 RL 24.10.07 Coordination of carbon reduction and renewable energy support policies Pedro Linares a,b, *, Francisco Javier Santos a, Mariano Ventosa a a) Instituto de Investigación Tecnológica. Univ.

More information

Finding an Optimal Path to 2050 Decarbonization Goals

Finding an Optimal Path to 2050 Decarbonization Goals Finding an Optimal Path to 2050 Decarbonization Goals John Bistline, Ph.D. Technical Leader 3 rd IEA-EPRI Workshop Paris October 17, 2016 Substantial Effort Beyond NDCs Will Be Required Billion tonnes

More information

REVIEW OF ISO-NE OPERATIONAL FUEL SECURITY ANALYSIS

REVIEW OF ISO-NE OPERATIONAL FUEL SECURITY ANALYSIS REVIEW OF ISO-NE OPERATIONAL FUEL SECURITY ANALYSIS January 30, 2018 www.poweradvisoryllc.com To: Clients and Colleagues From: John Dalton, President and Tyler Sellner, Researcher, Power Advisory LLC Earlier

More information

Indonesia s Generation Fuel Mix in an Era of Price Uncertainty Tom Parkinson 14 April 2015

Indonesia s Generation Fuel Mix in an Era of Price Uncertainty Tom Parkinson 14 April 2015 Indonesia s Generation Fuel Mix in an Era of Price Uncertainty Tom Parkinson 14 April 215 Who we are Helping Our Clients Create Value Market analysis and insights Asset valuation / M&A Policy / regulation

More information

Some Doubts about Oxford s Argument on Stranding Thermal Coal in Japan

Some Doubts about Oxford s Argument on Stranding Thermal Coal in Japan Some Doubts about Oxford s Argument on Stranding Thermal Coal in Japan Jun ARIMA Professor, Graduate School of Public Policies The University of Tokyo On May 12, the electronic version of the Nikkei carried

More information

Engaging consumers in a decarbonized world with the right pricing

Engaging consumers in a decarbonized world with the right pricing Engaging consumers in a decarbonized world with the right pricing BEHAVE 2016 Coimbra, 9 th of September of 2016 Ana Quelhas Director of Energy Planning Department ana.quelhas@edp.pt Agenda Achieving decarbonization

More information

DATA ASSUMPTIONS AND DESCRIPTION OF STUDIES TO BE PERFORMED 2014 EGSL & ELL Integrated Resource Plans

DATA ASSUMPTIONS AND DESCRIPTION OF STUDIES TO BE PERFORMED 2014 EGSL & ELL Integrated Resource Plans ENTERGY GULF STATES LOUISIANA, L.L.C. & ENTERGY LOUISIANA, LLC LPSC DOCKET NO. I-33014 DATA ASSUMPTIONS AND DESCRIPTION OF STUDIES TO BE PERFORMED 2014 EGSL & ELL Integrated Resource Plans This version

More information

Latest developments in Germany's -ongoing -Energiewende

Latest developments in Germany's -ongoing -Energiewende Latest developments in Germany's -ongoing -Energiewende Stefanie Pfahl Head of Wind Energy and Hydro Power Division, Federal Ministry for the Environment, Nature Conservation, Building and Nuclear I am

More information

IFIEC Position Paper on Nuclear Power

IFIEC Position Paper on Nuclear Power Securing competitive energy for industry IFIEC Position Paper on Nuclear Power Introduction and highlights 1. IFIEC represents the interests of industrial energy consumers in Europe for whom energy is

More information

WIND ENERGY - THE FACTS PART VI SCENARIOS AND TARGETS

WIND ENERGY - THE FACTS PART VI SCENARIOS AND TARGETS WIND ENERGY - THE FACTS PART VI SCENARIOS AND TARGETS Acknowledgements Part VI was compiled by Arthouros Zervos of the National Technical University of Athens, Greece (www. ntua.gr), and Christian Kjaer

More information

TREASURE COAST REGIONAL PLANNING COUNCIL M E M O R A N D U M. To: Council Members AGENDA ITEM 8

TREASURE COAST REGIONAL PLANNING COUNCIL M E M O R A N D U M. To: Council Members AGENDA ITEM 8 TREASURE COAST REGIONAL PLANNING COUNCIL M E M O R A N D U M To: Council Members AGENDA ITEM 8 From: Date: Subject: Staff February 20, 2009 Council Meeting Report on Florida Renewable Energy Potential

More information

First Wave or Second Wave?

First Wave or Second Wave? 24 July 2009 First Wave or Second Wave? It is time for US nuclear power plant projects with a first-wave build strategy to consider moving to the second wave By Edward Kee Introduction Most new nuclear

More information

Generation Technology Assessment & Production Cost Analysis

Generation Technology Assessment & Production Cost Analysis SPO Planning Analysis Generation Technology Assessment & Production Cost Analysis EAI Stakeholder Meeting July 31, 212 Technology Life Cycle Technology Deployment Over Time Conceptual Research & Development

More information

Background paper. Electricity production from wind and solar photovoltaic power in the EU

Background paper. Electricity production from wind and solar photovoltaic power in the EU Background paper Electricity production from wind and solar photovoltaic power in the EU February 2018 1 The 2009 Lisbon Treaty gave the European Union (EU) the authority to develop an energy policy containing

More information

Report on renewable energy supply in Europe addressing technological and political preconditions

Report on renewable energy supply in Europe addressing technological and political preconditions GA No.308481 Report on renewable energy supply in Europe addressing technological and political preconditions Rolf Golombek, Finn Roar Aune, Hilde Hallre The Frisch Centre (FCO) Brigitte Knopf, Paul Nahmmacher,

More information

Competitive energy landscape in Europe

Competitive energy landscape in Europe President of Energy Sector, South West Europe, Siemens Competitive energy landscape in Europe Brussels, siemens.com/answers Agenda Europe s competitiveness depends on an affordable and reliable energy

More information

About Energy UK. Introduction

About Energy UK. Introduction REC 34-15 Energy UK response to DG Comp investigation of Investment Contract (early Contract for Difference) for Lynemouth power station biomass conversion 10 May 2015 About Energy UK Energy UK is the

More information

EVA grossly miscalculates Wind s Capacity Factor:

EVA grossly miscalculates Wind s Capacity Factor: EVA grossly miscalculates Wind s Capacity Factor: Typical Pennsylvania Wind Capacity Factor: Myersdale Wind Energy Center 60.00% 50.00% Capacity Factor 40.00% 30.00% 20.00% 10.00% 0.00% 2004-2009 Source:

More information

The Cost of New Generating Capacity in Perspective

The Cost of New Generating Capacity in Perspective October 2009 The Cost of New Generating Capacity in Perspective Executive Summary Like all new generating capacity, there is uncertainty about the capital cost of new nuclear power plants. Estimates range

More information

Roadmap for Solar PV. Michael Waldron Renewable Energy Division International Energy Agency

Roadmap for Solar PV. Michael Waldron Renewable Energy Division International Energy Agency Roadmap for Solar PV Michael Waldron Renewable Energy Division International Energy Agency OECD/IEA 2014 IEA work on renewables IEA renewables website: http://www.iea.org/topics/renewables/ Renewable Policies

More information

As of December 31, 2011: Revenue of bn, down 2.6% vs (-1.2% like for like) Backlog of 45.6 bn, up 6.7% over 3 months, up 3.1% vs.

As of December 31, 2011: Revenue of bn, down 2.6% vs (-1.2% like for like) Backlog of 45.6 bn, up 6.7% over 3 months, up 3.1% vs. As of December 31, 2011: Revenue of 8.872 bn, down 2.6% vs. 2010 (-1.2% like for like) Backlog of 45.6 bn, up 6.7% over 3 months, up 3.1% vs. 2010 Paris, January 26, 2012 In 2011, AREVA s consolidated

More information

Electricity Markets. Rapid Conference May 17, Mike Rencheck Rencheck Consulting LLC

Electricity Markets. Rapid Conference May 17, Mike Rencheck Rencheck Consulting LLC Electricity Markets Rapid Conference May 17, 2016 Mike Rencheck Rencheck Consulting LLC Topics Market Formation - Basics 2016 / 2017 Forecasts Natural Gas, Renewable Portfolio Standards, and Climate Change

More information

From Market Uncertainty to Policy Uncertainty for Investment in LTO of NPP on Electricity Market

From Market Uncertainty to Policy Uncertainty for Investment in LTO of NPP on Electricity Market IAEA Fourth International Conference on Nuclear Power Plant Life Management Lyon, France 23-27 October 2017 From Market Uncertainty to Policy Uncertainty for Investment in LTO of NPP on Electricity Market

More information

EU Climate Change & Energy Policy and Nuclear Fission Research

EU Climate Change & Energy Policy and Nuclear Fission Research EU Climate Change & Energy Policy and Nuclear Fission Research NUCLEAR 2015, Pitesti, Romania, May 2015 Research and Innovation Christophe Davies Project Officer European Commission DG Research and Innovation

More information

BEREC Opinion. Phase II investigation pursuant to Article 7a of Directive 2002/21/EC as amended by Directive 2009/140/EC:

BEREC Opinion. Phase II investigation pursuant to Article 7a of Directive 2002/21/EC as amended by Directive 2009/140/EC: BEREC Opinion Phase II investigation pursuant to Article 7a of Directive 2002/21/EC as amended by Directive 2009/140/EC: Case PL/2011/1260: Revision of dispute settlement decisions concerning voice call

More information

Challenges for a Spanish utility in the procurement of CO 2 emissions

Challenges for a Spanish utility in the procurement of CO 2 emissions Challenges for a Spanish utility in the procurement of CO 2 emissions IBERDROLA July 2008 Brussels 7 th October 2011 1 1 Agenda Iberdrola s overview Current situation: Uncertainties Iberdrola s approach

More information

Investing under regulatory uncertainty

Investing under regulatory uncertainty August 2016 Investing under regulatory uncertainty Finding the new equilibrium The investment challenge In the past, assessing the prospects for generation investment was relatively straightforward. Given

More information

Role of Nuclear Cogeneration in a Low Carbon Energy Future?

Role of Nuclear Cogeneration in a Low Carbon Energy Future? Role of Nuclear Cogeneration in a Low Carbon Energy Future? Dr. Henri PAILLERE Senior Nuclear Analyst, Nuclear Development Division henri.paillere@oecd.org NC2I Conference, Brussels, 14-15 September 2015

More information

Uniform Price vs. Differentiated Payment Auctions

Uniform Price vs. Differentiated Payment Auctions Uniform Price vs. Differentiated Payment Auctions A Discussion of Advantages and Disadvantages PREPARED FOR Independent Electricity System Operator ICA Fundamentals and Concepts Stakeholder Meeting PREPARED

More information

Nuclear-renewable hybrid energy systems for non-electric applications

Nuclear-renewable hybrid energy systems for non-electric applications Nuclear-renewable hybrid energy systems for non-electric applications Cost issues Saied Dardour 3E Analysis Unit Planning and Economic Studies Section Division of Planning, Information and Knowledge Management

More information

Terms of Reference AG 2017/01

Terms of Reference AG 2017/01 Long-term Analysis of the Chilean National Electricity System Considering Variable and Intermittent Energy Resources Terms of Reference AG 2017/01 February 2017 Index 1. Introduction... 2 2. Objectives

More information

Client Name/Presentation Title

Client Name/Presentation Title Client Name/Presentation Title MARCH 2 Introduction This presentation will address the following topics: Comparative levelized cost of energy for various technologies on a $/MWh basis, including sensitivities,

More information

Economic Viability of Combined Heat and Power in ERCOT

Economic Viability of Combined Heat and Power in ERCOT WADE Annual Meeting & DistribuGen Conference and NYSERDA CHP Expo October 14-17, 2014, Westchester, New York Economic Viability of Combined Heat and Power in ERCOT PRESENTED BY Yingxia Yang O c t 1 6 t

More information

Prism 2.0: The Value of Innovation

Prism 2.0: The Value of Innovation Prism 2.: The Value of Innovation Bryan Hannegan, Ph.D. Vice President, Environment & Renewables Electric Power Research Institute 211 Summer Seminar August 1, 211 Change in Discounted GDP from 22 2 Through

More information

Zero Net Carbon Portfolio Analysis

Zero Net Carbon Portfolio Analysis Zero Net Carbon Portfolio Analysis Prepared for: Platte River Power Authority December 12, 2017 www.paceglobal.com Agenda Background Methodology Assumptions Cases Findings and Recommendations Page 2 Background

More information

Accelerating the Global Energy Transition. Dolf Gielen and Luis Janeiro IRENA Innovation and Technology Centre

Accelerating the Global Energy Transition. Dolf Gielen and Luis Janeiro IRENA Innovation and Technology Centre Accelerating the Global Energy Transition Dolf Gielen and Luis Janeiro IRENA Innovation and Technology Centre Bonn University/IRENA lecture series - Renewable Future 12 October, 2017 1 Renewable Future

More information

The cost of renewable energy:

The cost of renewable energy: The cost of renewable energy: A critical assessment of the Impact Assessments underlying the Clean Energy for All Europeans-Package Andreas Graf BERLIN, 2 JUNE 2017 State of play: outlook Malta presidency

More information

Submission by Prospect to the Department for Business Energy and Industrial Strategy

Submission by Prospect to the Department for Business Energy and Industrial Strategy Coal Generation in Great Britain Submission by Prospect to the Department for Business Energy and Industrial Strategy 8 th February 2017 www.prospect.org.uk Latest revision of this document: https://library.prospect.org.uk/id/2017/00289

More information

Executive summary OECD/IEA Executive Summary

Executive summary OECD/IEA Executive Summary Executive summary Great efforts are being made to boost the share of renewable energy sources in the global energy mix, driven by the need for enhanced energy security and environmental protection and

More information

Impact of Regional Greenhouse Gas Initiative and Renewable Portfolio Standards on Power System Planning

Impact of Regional Greenhouse Gas Initiative and Renewable Portfolio Standards on Power System Planning Impact of Regional Greenhouse Gas Initiative and Renewable Portfolio Standards on Power System Planning Panel on Impacts of GHG Programs and Markets on the Power Industry PESGM2006 Montreal June 21, 2006

More information

Renewable energy in Europe. E-turn 21 workshop Cologne, 10 May 2006

Renewable energy in Europe. E-turn 21 workshop Cologne, 10 May 2006 Renewable energy in Europe E-turn 21 workshop Cologne, 10 May 2006 Content 1. Introduction to Essent 2. EU policy 3. Support for renewable energy 4. Success factors 5. Outlook and recommendations Content

More information

How German Energiewende s Renewables Integration Points the Way

How German Energiewende s Renewables Integration Points the Way How German Energiewende s Renewables Integration Points the Way Reliability Increased BY MICHAEL HOGAN, CAMILLE KADOCH, CARL LINVILL AND MEGAN O REILLY 48 PUBLIC UTILITIES FORTNIGHTLY FEBRUARY 218 XT he

More information

Economics of the Fuel Cycle. Guillaume De Roo & John E. Parsons May 1, 2009

Economics of the Fuel Cycle. Guillaume De Roo & John E. Parsons May 1, 2009 Economics of the Fuel Cycle Guillaume De Roo & John E. Parsons May 1, 2009 Outline Part 1: The Fuel Cycle in Economic Perspective 2 strategic issues 3+ key alternative cycles Part 2: The Cost of the Fuel

More information

SYSTEMS ANALYSIS FOR ENERGY SYSTEMS USING AN INTEGRATED MODEL OF GIS AND TECHNOLOGY MODELS

SYSTEMS ANALYSIS FOR ENERGY SYSTEMS USING AN INTEGRATED MODEL OF GIS AND TECHNOLOGY MODELS H. Hamasaki, Int. J. of Design & Nature and Ecodynamics. Vol. 10, No. 4 (2015) 328 335 SYSTEMS ANALYSIS FOR ENERGY SYSTEMS USING AN INTEGRATED MODEL OF GIS AND TECHNOLOGY MODELS H. HAMASAKI Fujitsu Research

More information

Nuclear Power and Sustainable Development

Nuclear Power and Sustainable Development Nuclear Power and Sustainable Development H-Holger Rogner International Institute for Applied Systems Analysis (IIASA) Royal Institute of Technology (KTH), Stockholm IX International School on Nuclear

More information

A Sustainable Energy Future for Australia

A Sustainable Energy Future for Australia A Sustainable Energy Future for Australia Dr Mark Diesendorf Institute of Environmental Studies University of New South Wales m.diesendorf@unsw.edu.au Collapse of Larsen B ice shelf, Antarctica 1 Australian

More information

New England States Committee on Electricity

New England States Committee on Electricity Renewable and Clean Mechanisms 2.0 Study Phase I: Scenario Analysis Winter 2017 New England States Committee on Electricity Overview Context Analytical Approach and Modeling Assumptions Scenario Analysis

More information

Madrid 23. July of course. Industry, They also. new challenges. energy in. Spain lies in. connecting

Madrid 23. July of course. Industry, They also. new challenges. energy in. Spain lies in. connecting Energy Policies of IEA Countries - In-depth Review of Spain 2015 IEA Executive Director Maria van der Hoeven Madrid 23 July 2015 Thank you and good morning. I am pleased to be here with you today to present

More information

Nuclear Renaissance and the U.S.-Japan Alliance: Finding New Markets and Preventing Proliferation

Nuclear Renaissance and the U.S.-Japan Alliance: Finding New Markets and Preventing Proliferation Nuclear Renaissance and the U.S.-Japan Alliance: Finding New Markets and Preventing Proliferation Dr. Charles D. Ferguson Philip D. Reed Senior Fellow for Science and Technology October 30, 2009 Agenda

More information

Ammonia, Carbon Capture and Gas Turbine ensure U.S. Energy Independence

Ammonia, Carbon Capture and Gas Turbine ensure U.S. Energy Independence Ammonia, Carbon Capture and Gas Turbine ensure U.S. Energy Independence Edgar Vercruysse Luc Vercruysse The 9 th Annual NH 3 Fuel Conference, San Antonio, TX, October 01-03, 2012 http://www.probatex.info

More information

An economic assessment of the benefits of storage in South Africa

An economic assessment of the benefits of storage in South Africa An economic assessment of the benefits of storage in South Africa by Jeremy Hargreaves, Energy & Environmental Economics and Paul Frink, Energy Solutions, Parsons Energy storage technologies have many

More information

G7 Kitakyushu Energy Ministerial Meeting Kitakyushu Initiative on Energy Security for Global Growth Joint Statement

G7 Kitakyushu Energy Ministerial Meeting Kitakyushu Initiative on Energy Security for Global Growth Joint Statement G7 Kitakyushu Energy Ministerial Meeting Kitakyushu Initiative on Energy Security for Global Growth Joint Statement We, the Energy Ministers of Canada, France, Germany, Italy, Japan, the United Kingdom,

More information

Bulk Power System Integration of Variable Generation - Program 173

Bulk Power System Integration of Variable Generation - Program 173 Program Description Program Overview Environmentally driven regulations such as state-mandated renewable energy standards and federal air and water standards, along with improved economic viability for

More information

Europe s Coming Challenges in Meeting Decarbonisation Objectives

Europe s Coming Challenges in Meeting Decarbonisation Objectives Europe s Coming Challenges in Meeting Decarbonisation Objectives Geoffrey J. Blanford, Ph.D. EPRI-IEA Workshop on Challenges in Electric Sector Decarbonisation 28 September 215, Paris EU electric sector

More information

Flexible energy for efficient and cost effective integration of renewables in power systems

Flexible energy for efficient and cost effective integration of renewables in power systems A Wärtsilä White Paper supported by modelling conducted by Redpoint Energy, a business of Baringa Partners Flexible energy for efficient and cost effective integration of renewables in power systems 2

More information

27th USAEE/IAEE North American Conference

27th USAEE/IAEE North American Conference 27th USAEE/IAEE North American Conference "Developing & Delivering Affordable Energy in the 21st Century" Edmilson Moutinho dos Santos Associate Professor IEE - USP Email: edsantos@iee.usp.br Fone: (55-11)

More information

European Smart Power Market Project

European Smart Power Market Project European Smart Power Market Project Karsten Neuhoff Climate Policy Initiative / DIW Berlin Background and Scope In the EU, at least 200 gigawatts (GWs) of new and additional renewable energy sources may

More information

A Roadmap for Photovoltaic Auctions in Israel Targets and vision Honi Kabalo - Head of Renewable Energy, Electricity Regulatory Authority

A Roadmap for Photovoltaic Auctions in Israel Targets and vision Honi Kabalo - Head of Renewable Energy, Electricity Regulatory Authority A Roadmap for Photovoltaic Auctions in Israel Targets and vision Honi Kabalo - Head of Renewable Energy, Electricity Regulatory Authority The evolution of Israel s Renewable Energy Scheme 2017-2020: Solar

More information

Power Perspectives 2030

Power Perspectives 2030 Executive Summary A contributing study to Roadmap 2050: a practical guide to a prosperous, low-carbon europe EXECUTIVE SUMMARY A. CONTEXT In October 2009, the European Council set an economy-wide greenhouse

More information

Lessons from UK energy policy & Energy Market Reform

Lessons from UK energy policy & Energy Market Reform Lessons from UK energy policy & Energy Market Reform Michael Grubb Professor of International Energy and Climate Change Policy, University College London (UCL) Senior Advisor, UK Office of Gas and Electricity

More information

CONTENTS TABLE OF PART A GLOBAL ENERGY TRENDS PART B SPECIAL FOCUS ON RENEWABLE ENERGY OECD/IEA, 2016 ANNEXES

CONTENTS TABLE OF PART A GLOBAL ENERGY TRENDS PART B SPECIAL FOCUS ON RENEWABLE ENERGY OECD/IEA, 2016 ANNEXES TABLE OF CONTENTS PART A GLOBAL ENERGY TRENDS PART B SPECIAL FOCUS ON RENEWABLE ENERGY ANNEXES INTRODUCTION AND SCOPE 1 OVERVIEW 2 OIL MARKET OUTLOOK 3 NATURAL GAS MARKET OUTLOOK 4 COAL MARKET OUTLOOK

More information

New Jersey Renewable Energy Market Assessment

New Jersey Renewable Energy Market Assessment New Jersey Renewable Energy Market Assessment Final Report to Rutgers University Center for Energy, Economic and Environmental Policy Prepared by Navigant Consulting Inc., Sustainable Energy Advantage

More information

Renewable Energy Economics and Technology Status - Program 84

Renewable Energy Economics and Technology Status - Program 84 Renewable Energy Economics and Technology Status - Program 84 Program Description Program Overview Renewable energy is fundamentally changing the electricity industry's strategic landscape. Active industry

More information

The Commission's Energy Roadmap 2050

The Commission's Energy Roadmap 2050 MEMO/11/914 Brussels, 15 December 2011 The Commission's Energy Roadmap 2050 Why is there a need for the Roadmap 2050? The EU has set itself the goal to reduce greenhouse gas emissions to 80%-95% below

More information

Accelerating energy innovation to achieve a sustainable future

Accelerating energy innovation to achieve a sustainable future Accelerating energy innovation to achieve a sustainable future Tom Kerr OECD Green Technology and Innovation Workshop Paris,25 October 2010 IEA energy technology activities Where are we today? Global Gaps

More information

Corporate renewable energy procurement survey insights

Corporate renewable energy procurement survey insights www.pwc.com/us/renewables Corporate renewable energy procurement survey insights June 2016 Executive summary One of the biggest developments in the renewable energy marketplace in the last 12 24 months

More information

Wind Energy The Facts

Wind Energy The Facts Wind Energy The Facts Bruce Douglas Chief Operating Officer European Wind Energy Association Riga 22 May 2009 WHAT IS THE EUROPEAN WIND ENERGY ASSOCIATION? EWEA is the voice of the wind industry, actively

More information

Portland General Electric 2016 Integrated Resource Plan. OPUC Public Meeting December 20, 2016

Portland General Electric 2016 Integrated Resource Plan. OPUC Public Meeting December 20, 2016 Portland General Electric 2016 Integrated Resource Plan OPUC Public Meeting December 20, 2016 Agenda Process and Compliance Approach and Summary Analysis Action Plan Next steps 2 2013 IRP Order Resource

More information

APSC Docket No U Entergy Arkansas, Inc Integrated Resource Plan

APSC Docket No U Entergy Arkansas, Inc Integrated Resource Plan Entergy Arkansas, Inc. APSC FILED Time: 10/31/2012 2:33:12 PM: Recvd 10/31/2012 2:30:51 PM: Docket 07-016-U-Doc. 24 425 West Capitol Avenue P. O. Box 551 Little Rock, AR 72203-0551 Tel 501 377 4457 Fax

More information

Long-Term Policy: Concepts, Methods, Industry Practice

Long-Term Policy: Concepts, Methods, Industry Practice Long-Term Policy: Concepts, Methods, Industry Practice Berlin Conference on the Human Dimensions of Global Environmental Change 22. Februar 2008 Stefan Ulreich, Upstream/Generation Uncertainties require

More information

Proposal of draft summary & conclusions

Proposal of draft summary & conclusions WP7: Investing for sustainability Proposal of draft summary & conclusions Madrid, May 19 & 20, 2005 Energy policy objectives Security of supply Efficiency & freedom of choice for consumers Competitiveness

More information

Scenarios on Power Generation in Thailand

Scenarios on Power Generation in Thailand 2012 International Conference on Future Environment and Energy IPCBEE vol.28(2012) (2012)IACSIT Press, Singapoore Scenarios on Power Generation in Thailand Weerin Wangjiraniran 1+, Raksanai Nidhiritdhikrai

More information

Southern California Edison Approach to Renewable Integration June 7, 2011

Southern California Edison Approach to Renewable Integration June 7, 2011 Southern California Edison Approach to Renewable Integration June 7, 2011 Page: 0 SCE s 2010 Resource Mix Natural Gas All Resources 100% = 75 billion kwh/yr Renewable Resources 100% = 14.5 billion kwh/yr

More information

Emission Cuts Realities Electricity Generation Cost and CO 2 emissions projections for different electricity generation options for Australia to 2050

Emission Cuts Realities Electricity Generation Cost and CO 2 emissions projections for different electricity generation options for Australia to 2050 Emission Cuts Realities Electricity Generation Cost and CO 2 emissions projections for different electricity generation options for Australia to 2050 By Peter Lang January 2010 Abstract Five options for

More information

Revista Economică 66:5 (2014) A COMPARATIVE ANALYSIS OF THE RELATIONSHIP BETWEEN THE ECONOMY AND ENVIROMENTAL PROTECTION IN ROMANIA AND GERMANY

Revista Economică 66:5 (2014) A COMPARATIVE ANALYSIS OF THE RELATIONSHIP BETWEEN THE ECONOMY AND ENVIROMENTAL PROTECTION IN ROMANIA AND GERMANY A COMPARATIVE ANALYSIS OF THE RELATIONSHIP BETWEEN THE ECONOMY AND ENVIROMENTAL PROTECTION IN ROMANIA AND GERMANY FLEISCHER Wiegand Helmut 1 Lucian Blaga University of Sibiu Abstract The relationship between

More information

Estonia Energy efficiency report

Estonia Energy efficiency report Estonia Energy efficiency report Objectives: 2.1 TWh of end-user energy savings by 2016 25% share of renewables in final energy consumption by 2020 4.8% share of renewables in electricity production by

More information

SUSTAINABLE USE OF OCEANS IN THE CONTEXT OF THE GREEN ECONOMY AND THE ERADICATION OF POVERTY, PRINCIPALITY OF MONACO, NOVEMBER, 2011

SUSTAINABLE USE OF OCEANS IN THE CONTEXT OF THE GREEN ECONOMY AND THE ERADICATION OF POVERTY, PRINCIPALITY OF MONACO, NOVEMBER, 2011 SUSTAINABLE USE OF OCEANS IN THE CONTEXT OF THE GREEN ECONOMY AND THE ERADICATION OF POVERTY, PRINCIPALITY OF MONACO, 28 30 NOVEMBER, 2011 Implementation of Offshore Wind Power & Potential of Tidal, Wave

More information

Renewable Portfolio Standards

Renewable Portfolio Standards Renewable Portfolio Standards Lisa Schwartz Presentation to Oregon State University Energy Economics Class Feb. 22, 2010 The Regulatory Assistance Project China EU India United States About the Regulatory

More information

The economic future of nuclear power

The economic future of nuclear power The economic future of nuclear power The MIT Faculty has made this article openly available. Please share how this access benefits you. Your story matters. Citation As Published Publisher Joskow, Paul

More information

Global Nuclear Policy Development and Trends

Global Nuclear Policy Development and Trends Global Nuclear Policy Development and Trends Agneta Rising Director General Nuclear Energy Seminar Energiforsk 25 January 2017, Stockholm Global nuclear generation 2 Global nuclear status 3 Global Reactor

More information